Enforcement notification – Tax evasion – Fugitive Brampton tax preparer caught and jailed for $34 million fraudulent charitable donation scheme

BRAMPTON, ON, March 22, 2024 /CNW/ – The Canada Revenue Agency (CRA) announced today that Festus Bayden of Brampton, Ontario, was sentenced on February 27, 2024, in the Ontario Court of Justice in Brampton, to three years in jail. Bayden pleaded guilty to one count of fraud over $5,000 under the Criminal Code.

Bayden was a partner in a tax preparation business known as E & F Tax Associates or as Bankay Financial Services Inc. in Toronto, Ontario, and later in Brampton. A CRA investigation revealed that Bayden claimed more than $34 million in false charitable donations on individual income tax returns for the 2004 to 2006 tax years that he prepared for over 30 of his clients. Bayden told his clients that a larger refund or reduced taxes could be obtained if they made a charitable donation for an amount that was far less than what was actually claimed on their income tax returns. Bayden then provided his clients with false charitable donation receipts in the names of various charitable organizations to which he was connected. Bayden charged his clients approximately 10% of the face value of the false charitable donation amounts that were claimed.

Bayden fled Canada before authorities could prosecute him on the charges. He was apprehended when he returned to Canada on June 13, 2023.

All case-specific information above was obtained from the court records.

Tax promoters are individuals or corporations who promote or sell schemes that seek to break or bend the rules of Canadian tax laws, including the Income Tax Act and the Excise Tax Act. These promoters deliberately make false statements to assist their clients in avoiding or evading tax. As a result, they obtain a financial benefit from the fees they receive from their clients. To maintain the fairness of our tax system, the CRA holds both those promoters who facilitate tax evasion, as well as those who use their services to evade taxes, accountable for their actions. 

The CRA is dedicated to maintaining the integrity of Canada’s tax system, thereby contributing to the social and economic well-being of Canadians. The CRA continues to aggressively pursue tax evasion and false claims with all the tools available to it. The CRA works to make sure that individuals and businesses report all income earned and only claim benefits to which they are entitled, so that important benefit programs can be administered to those who need them. Any individual or business who underreports income, or claims losses or benefits to which they are not entitled, may have to repay the benefit amounts and may be subject to other possible action.

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SOURCE Canada Revenue Agency